Malaysian bubble-tea stoush now question of loyalty

Malaysia’s Chatime bubble-tea stoush continues, with a fresh argument regarding outlet loyalties.

Taiwanese Chatime franchise owner La Kaffa International says nearly 50 outlets will stay with it, while former Malaysian master franchisee Loob Holdings claims that only four outlets have opted to keep the Chatime banner.

Loob CEO Bryan Loo says more than 95 per cent of the total 165 Chatime outlets in Malaysia have decided to quit the brand and adopt Loob Holding’s new brand.

“Only three franchisees, who run a total of four stalls, do not want to move on with us. They will be handed back to the franchise owner,” he told journalists at Kuala Lumpur’s Pavilion Shopping Mall after launching his new brand, Tealive.

He did not name the franchisees or pinpoint their outlets.

Loo says the new name was chosen to appeal not only to Malaysians, but across the other regions – and internationally.

“So we felt like we had to find a very good name; and it had to be different from Chatime. We started with over 300 names and over three days, we shortlisted it down to 30 names and then the last one. In the end, we wanted a name that was simple and easy to digest no matter who you are.

“While shortlisting, we felt that we exceptionally liked the names that had different pronunciations.

People used to pronounce Chatime in so many different ways and it stirred conversation. So we wanted the same spirit; and that’s how we landed on the name Tealive (live pronounced similar to ‘a live show’). Some people could pronounce it tea-live (as in live at home) but the important thing is the underlying meaning to it – we want to bring a new life to tea.”

Loo said in an interview that Tealive will be very different to other brands in the crowded bubble-tea market.

“We want to be the brand that protects the weak and isn’t afraid of the strong; but also the brand that embraces changes. On the other side, with our hands untied, I believe that over the next quarters there is going to be a lot of innovation in terms of products, which we couldn’t do before.

“When we used to collaborate with local brands, we were served warning letters; so moving forward that’s something we don’t have to worry about, so we can be innovative. I would also like to establish a regional R&D centre to come up with more creative drinks that will excite the market. Also, we’re looking to carry on with our aggressive expansion and move into other regions. We were already planning to do that with the previous brand, but now we get to do it with Tealive,” Loo said.

La Kaffa contradicts claims

At a press conference in a Kuala Lumpur hotel earlier this month, La Kaffa International executive VP Teresa Wang said the company was confident that nearly 50 franchisees would continue to collaborate with Chatime.

At the same time, La Kaffa claimed Loob Holdings had stopped ordering the halal ingredients it supplied from Taiwan for Chatime’s Malaysia outlets. Loob Holdings has denied this, with Loo saying its products are certified by the Department of Islamic Development Malaysia (Jakim).

The dispute bubbled to the surface in early December when the Taiwanese company terminated the master franchise agreement between the two parties, even though there was more than 20 years left on the deal.

Loo has lodged a police report over the sudden termination, and both companies have taken the dispute to the Singapore International Arbitration Centre.

Vietnam foray

Meanwhile, Loo says Tealive will be opening its first overseas outlet in Vietnam before October.
“We plan to deliver five outlets in Vietnam this year, and hope to increase that with another 20 outlets by the end of next year,” he says.

Chatime is already in Vietnam with seven outlets in Hanoi, two in Ho Chi Minh City and one in Di An, Binh Duong province.

Loo says Tealive will also venture into other Asean countries within the next few years.

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